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North Korea on the Brink: Issue Brief 21, August 1997 Report on July 30 Center for War, Peace, and the News Media press roundtable. Delegates from North Korea, South Korea, the United States and China sat down on August 5 in New York to iron out details for the formal initiation of Four-Party Korean Peace Talks. Officially, the goal of the talks, likely to begin in September or October 1997 in Geneva, is replacing the 1953 Korean War Armistice with a permanent peace agreement for the Korean peninsula. The diplomatic agenda surrounding the talks, however, according to Korea experts at a July 30 press roundtable organized by the Center for War, Peace and the News Media at the United Nations, is much broader. As the talks get underway, the formal negotiations will inevitably intensify a wide range of parallel official and unofficial talks on reduction of the military confrontation on the peninsula, increased food aid for North Korea, full implementation of the 1994 Agreed Framework, diplomatic recognition of the DPRK, direct North-South dialogue, and, ultimately, Korean reunification. Paralleling the talks is the international initiative headed by the Korean Peninsula Energy Development Organization (KEDO) to build two nuclear reactors in North Korea. The reactor project is seen as a critical contribution to unlocking the political situation on the ground, thus helping end the last imminent conflict of the Cold War. The July 30 Roundtable included discussion with four leading US experts on the Korean situation: Stephen Bosworth, Executive Director of the Korean Peninsula Energy Development Organization (KEDO) and former US Ambassador to the Philippines; Donald Gregg, Chairman of the Korea Society and former US Ambassador to South Korea; K.A. Namkung, Director of the Conflict Resolution Program at the Atlantic Council and a long-time participant in unofficial talks with North Korea; and Leon Sigal, author of the forthcoming book Disarming Strangers: Nuclear Diplomacy with North Korea. What follows is a summary of their remarks. Jim Wurst served as rapporteur. Differing Agendas "There is more reason to be hopeful about the talks now because of policy changes in both the US and the South," said Donald Gregg. Nevertheless, he and others noted, each of the four parties approach the table with different agendas. After what Gregg called mistakes and inattention during the Clinton administration's first term, the Administration is much more focused on making progress in the talks. Although she lacks experience in Asia, Secretary of State Albright appears to be moving aggressively and effectively toward constructive talks. Further, Washington now has some credibility in approaching the North, resulting from the agreement over the North's nuclear program and Washington's leadership in the famine relief program. Gregg em[hasized the crucial role of the US in working out a North Korean apology for the September 1996 submarine incident, which threatened to derail the Agreed Framework. Viewing South Korea, Gregg noted that the predominantly hard line in Seoul in the mid-1990s has moderated, especially in light of studies about the likely astronomical costs of any rapid reunification following a North Korean collapse. The South was largely frozen out of negotiations on the Agreed Framework, and was initially quite reluctant to support KEDO. Now, the government in Seoul is again focusing on a "soft landing scenario" after concluding that pushing a North Korean collapse would likely yield a reunification bill of between $200 billion to $3 trillion. The ROK business community virtually rebelled at such projections, said Gregg. The lack of diplomatic recognition of North Korea could be an important sticking point for China as well as for North Korea, according to K.A. Namkung. Recognition will not likely be a precondition for talks, but "Beijing will want political imbalances to be addressed very early, meaning full diplomatic relations among all parties." Namkung also noted that China will likely support North Korea in its effort to resist any US or South Korean effort turn the four party talks into "two plus two talks," that is, direct talks between North and South Korea, with the US and China acting merely as observers and facilitators. North Korean Strategy Looking at the historical background to the talks, Namkung stated that North Korea made a fundamental policy decision in the late 1980s to pursue peace on the peninsula and constructive relations with the US and the West. The context should go back to 1988 when the US responded to a North Korean initiative by issuing a set of guidelines for improving relations. Since then, he asserted, North Korea has pursued talks with a single-minded focus: "Every step of the way, North Korea has kept these talks on track and made sure mishaps and mistakes did not interfere with the process." "This does not represent the last gasp of a dying regime, but fulfillment of a strategy set in motion years ago," said Namkung who believes Pyongyang envisions a united neutral peninsula - "a Switzerland of the East" - that has good relations with the US, possibly even a patron-client relationship just as the US and Japan had after Word War II. "North Korea is very focused....[the North] is probably better prepared for the talks than the other three." Gregg agreed that former North Korean leader Kim Il Sung developed such a vision and began to reach out to the US, in large part because the North ultimately viewed Japan as its longer term adversary. However, noted Gregg, it is not clear how strong the North Korean consensus is. "Where does the submarine incident fit? I'm not sure if all the North Koreans got the message." Namkung and Sigal argued against reading too much into the submarine incident. Namkung called it "surveillance that went awry and an intelligence disaster." Sigal asserted that North Korea "has no idea of the order of battle in the South." Spying is thus the only way to find out, and submarines are the primary vehicle for dropping off and picking up spies. Until the US began to share its intelligence with Seoul, Sigal stated, South Korea engaged in similar spying missions in the North. "Obviously the mission was blown," Sigal said. The incident was used by some in South Korea to stop US-North Korea talks, negotiations on ballistic missiles and to stop progress toward KEDO's construction of the two nuclear reactors mandated by the Agreed Framework. But the apology afterwards, Gregg said, was "a major turning point since it was the first time the North ever apologized for such an incident. This means Kim Jong Il is in control and can exercise his influence if he wants." China and Japan While most of the roundtable focused on the relationships among the US and North and South Korea, the speakers also discussed two other key players in the region, China and Japan. China, the only country involved in the four-party talks without troops on the peninsula, was seen as a wild card in the negotiations. However, the panelists did not always agree on what that meant. Namkung called it a myth that China was useful in halting the North Korean nuclear threat. "I have no idea where this comes from," he said. China was certainly concerned and worked so as not to escalate the situation into full blown crisis, but did not support the US since it opposed sanctions on the DPRK and was vague about the degree of its negative reaction to a possible US attack on the DPRK's nuclear facilities. Gregg asserted that "The Chinese have been more helpful than they have been given credit for.... [It was important for North Korea] to have someone to turn to for a broader perspective. Overall they have been helpful, but their objectives are not identical to ours," said Gregg. "China likes weak states on it borders but does not like instability." It might prefer the status quo, but it is unlikely to interfere with peaceful integration. Namkung noted that while it might be impossible for China to provide enough aid by itself to keep North Korea afloat in the long term, it has already been providing more aid than the US and South Korea combined. China will never permit an economic collapse in North Korea, he said. Japan is not a party to the four-party talks, nevertheless it is a strategic and economic force to be reckoned with, according to all the speakers. "Japan's role will be critical to the outcome of the talks," Sigal said, "Tokyo's role has not been helpful because it is letting Seoul frame its position." Japan should be much more forthcoming with food aid, according to Gregg. Namkung noted that both North Korea and Japan are sending out feelers for improving their relations, and predicted that this will soon lead to substantial Japanese food aid. KEDO's Progress Perhaps the most concrete mechanism for improving the situation is the Korean Peninsula Development Organization (KEDO), the organization created by the 1994 Agreed Framework. The Executive Director of KEDO, Stephen Bosworth, explained that KEDO has two official missions: to contract and oversee construction of two new light water reactors to replace the existing DPRK reactors where the US says the North has manufactured weapons-grade materials, and to provide 500,000 metric tons of heavy fuel oil each year until the new reactors are operating. But, according to Bosworth, KEDO also has a broader mission: to contribute to peace and security in East Asia. Today, he noted, KEDO is the only existing model of multilateral cooperation in East Asia, and its steady progress demonstrates the great potential for other economic development and cooperation initiatives in Korea and in the region at large. As the agenda for the Four Party Talks is finalized in New York, KEDO is about to formally break ground in North Korea at the reactor site. "We will be at work in North Korea within the next few weeks," said Bosworth. The goal is to finish the reactors by 2003, which he admitted is clearly a difficult target to reach especially if political controversies like the submarine incursion come up again. To date, the process has moved ahead in an extremely businesslike fashion, according to Bosworth. "KEDO and North Korea had to negotiate six protocols and 19 understandings governing everything from the transportation of equipment to the site (the shortest route - crossing the DMZ - was out of the question, so everything has to originate in Beijing) to the diplomatic standing of KEDO employees." Negotiations have been difficult, but they have made substantial progress despite the need for North Korea to dramatically change the way it has done business with the outside world in virtually every aspect of the program. KEDO's construction efforts will soon create a virtual new town in North Korea under KEDO jurisdiction with its own security force, medical and recreational facilities as well as the construction operations. Several thousand North and South Korean engineers and workers will begin working side by side. Politically, KEDO has grown from the three founding members of the Executive Committee - the U.S., South Korea and Japan - to include seven general member states - Australia, Argentina, Chile, Indonesia, Finland, Canada and New Zealand. With the imminent accession of the European Union (EU) to the Executive Committee, KEDO is truly becoming a global organization. "The EU interest was an expression of concern for nonproliferation on a global basis and a desire to be politically engaged in East Asia," said Bosworth. There are also commercial interest in competing for elements of reactors." While the reactor cores themselves will be constructed by the Korean Electric Power Corporation (KEPCO) of South Korea (itself a difficult concession by North Korea) there will be related contracts worth several hundreds of million dollars. "At the same time, the EU has pledged 15 million ECUs (approx. 18.2 million USD) to help close the gap in the financing of the oil program," Bosworth said. "The 500 metric tones of oil will cost between $60-65 million in 1997," Bosworth said, "but so far only $25 million has been pledged from the US and other countries with Japan establishing a special financing facility to be used as collateral for buying the oil, which is to be used for heating and not industrial production." Construction as Diplomacy All the participants saw KEDO as more than a construction project. "Seeing a South Korean firm using South Korean workers building a power plant in North Korea is the kind of economic cooperation that is essential if there is to be long-term integration," said Sigal. "From broader perspective, the KEDO model is very interesting, a very useful alternative to unilateral action... or to simply consigning an issue to the UN," said Namkung. However, Gregg warned against putting too much on KEDO's plate just because KEDO is working. "KEDO is working on what it was designed to work on," said Gregg. Bosworth agreed, opposing the idea of a "KEDO for food" saying the World Food Program was already fulfilling that role. It might be possible to explore other, parallel multinational organizations to work on related issues, they both agreed, citing agricultural reform and improving North Korea's electricity grid to take full advantage of the new reactors. Gregg said South Korea now views KEDO more positively than it did, as does the U.S. Congress. Bosworth pointed out when KEDO first started it "was not universally popular in the US Congress," but last year Congress provided full funding. "Opposition has diminished." he said. The Role of Food The food question remains politically linked to all other issues, but the speakers did not believe that struggles over food aid would prove to be a substantial obstacle to the talks. "[Food] will not be a salient point once the talks begin," Namkung suggested. In fact, he noted, given the substantial increases in food aid in recent months, the North has essentially already had its preconditions for the talks met. "[It was] an astute move on the part of the South to name Wong-Shik Chung, the former Prime Minister of South Korea, as head of the Red Cross efforts in the South," said Gregg, "While the North will not have bilateral talks with the South, the North could have constructive talks with the Red Cross." Avoiding the Meat Grinder No matter the progress in the talks or with KEDO, the specter of war remains. For the speakers, this suggests that the US and South Korea need to address their own willingness to explore mutual military reductions and confidence building measures that can further a longer term peace in Korea. Sigal said the balance of forces is overwhelmingly in favor of the South, even leaving the US out of the equation. In this contxt, unilateral cuts from the North, according to Sigal, are "out of the question." The North also sees a longer term threat from Japan, and the US and its allies ultimately need to deal with that concern, according to Sigal. "The Cold War metaphor of two scorpions in a bottle still holds in Korea," said Gregg. The ROK does hold a strategic advantage, but even with a North Korean defeat, a two week war involving massive exchanges of bombs, artillery, and missiles around Seoul would be a human meat grinder. "Both sides know that and both sides fear it could be triggered by the other," he said. This is why it is so critical to deal with the military dimension on the ground. Will the North Korean military go along with force reductions? According to Namkung, "there is no sign that the military disagrees with the fundamental North Korean strategy." In closing, Sigal warned that, "There will be no change in the North Korean military posture without clear signs of cooperation from South Korea and Japan. There have to be clear, unambiguous signs that they are willing to cooperate. North Korea needs reassurance if they are going to play... North Koreans are not nice players but they are playing. That's the deep logic behind this."
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